In the second exclusive carrier billing outlook video series supported by Bango, we hear from Herman Singh, Chief Digital Officer of MTN Group.

MTN Group is Africa’s number one telecommunications company serving 240 million subscribers in 24 countries in Africa and the Middle East. In this video, Herman Singh, Chief Digital Officer at MTN Group details how mobile-first continent Africa will benefit from Direct Carrier Billing (DCB) to aid mobile commerce. However, things aren’t so straight forward in a continent where mobiles may not be smartphones and don’t always have apps.

According to Herman, most people in Africa use feature phones and this means content consumption such as music-streaming runs on a browser. With 60-70% of Africa’s population wanting to engage in commerce, the best way to monetize small browser-based transactions is to use carrier billing. However, Herman indicates that, “the challenge with any virtual product is how you collect payment, so it can only grow to the extent that we can get people to pay for it. There's a propensity to pay, but an inability to actually do remote business.” This is because only a small amount of Africa’s population, “probably 5 – 10 percent… are banked.” Therefore, DCB is one feasible solution for digital currency in an unbanked continent. Herman states that DCB, “works really well when it's a small payment… buying a screen saver, a ringtone, a game, one music track, a subscription for access to a music service etc.” Moreover, DCB is quick and easy as there’s only one click to pay. It’s also secure because DCB is, “fully integrated (and) protected end-to-end.” Therefore, customers have peace of mind knowing their money is safe.

When consumers only have credit/debit card as payment options, conversion rates in developing markets can be as low as 0.5 percent. However, conversion could be as high as 82.4 percent when DCB is offered. MTN have created a mobile money wallet which was enabled in Google Play by Bango and Singh explains that it works by the payment coming off the wallet, “instead of hitting the airtime system.” African consumers can use the mobile money wallet in place of a bank account. What’s more, consumers can top up their wallets with cash and this means there is this no restriction on usage for people who aren’t banked.

Herman notes that although MTN have increased their customer base they still struggle with a lack of access to data and the right handsets. “We've noticed a dramatic increase in media consumption with smartphones and with the adoption of data bundles. (However), half the smartphones in Africa are not connected to the internet,” Herman states. He goes further saying that as the price of smartphones drops, MTN can formalize and industrialize the second-hand smartphone market, driving education on how to use the internet. Herman believes this will eliminate the initial barrier so we will see an, “increase in the adoption of m-commerce.”